As if it weren't bad enough you come on our forums with your self-serving promotional propaganda (that's a bannable offense, by the way)... your post is misleading and misinformative to boot, which is an extreme disservice to our readers.
somerset wrote:
Somerset Mortgage Lenders and Gregg Marcus strive to keep the public educated with tips meant to make getting your loan as easy and painless as possible. To this end, they have put together this brief article on using downpayment gifts for your FHA loan.
Unlike with most other conventional loans, the Federal Housing Authority (FHA) allows borrowers to pay some or all of their down payment with gift funds. No verification of the source of the down payment money is required. All that needs to be done is for the money to first be deposited into the borrower’s bank account or an escrow account before and until the loan is approved, and for proof of that deposit to be provided.
However, most FHA-approved lenders now require the gift funds to be sourced to verify its legitimacy. So not entirely true.
Quote:
Greater than half of first-time homebuyers receive gift money from relatives in order to help them pay for their down payment. Besides relatives, other accepted sources of down payment gifts are friends, labor unions, faith-based organizations, and charity organizations. Another valid (and novel) source of down payment assistance is through the Bridal Registry program whereby newlywed couples can get gift money deposited into an account for them to use towards a down payment on an FHA loan.
Yes, those are legit examples, but again, most lenders are going to require proof that it's coming from an allowable source.
Quote:
In 2004, President George Bush announced intentions to convince Congress to eliminate the down payment requirement for FHA loans entirely, but so far nothing has come of that.
Ironically, it was the Seller-Funded Downpayment Assistance providers who fought against a 100% financing program for FHA. I won't bother to cite all the various reports that show how detrimental no-money down loans and high-LTV financing have negatively impacted housing finance. If you aren't aware of that by now, you've been living under a rock for the past three years or more. Irregardless of the 0.5% increase in downpayment requirements, FHA still allows gift funds to be used.
Quote:
Recent attempts in the U.S. Congress to pass legislation that would make it extremely difficult for charitable organizations that provide down payment gift funds to claim tax exempt status, thereby disqualifying them from being able to provide a down payment gift fund for FHA loans at all has fortuitously failed.
Is this a vague reference to the IRS' 2006 ruling that seller-funded downpayment assistance organizations may not consider that part of their operations a "charitable business" since the money's really just a wash and their programs are, as this article states, a "scam"? http://www.irs.ustreas.gov/new.....75,00.html
It's becoming obvious where you're going with this.
Quote:
Despite the attempted U.S. Department of Housing and Urban Development (HUD) rule to eliminate all down payment assistance programs, the U.S. District Court intervened to protect low-to-moderate income potential homebuyers. The result of this injunction is that organizations like the Home Down Payment Gift Foundation and the Genesis Foundation can still claim tax exempt status and still provide down payment gifts to would-be FHA mortgages, at least until there is some sort of final resolution on the matter.
Your information appears to be outdated. In case you missed it, the Housing and Economic Recovery Act of 2008 eliminated seller-funded downpayment assistance programs as an allowable source of downpayment funds for FHA borrowers. It did NOT, however, eliminate other traditionally accepted sources of downpayment assistance. Would you care to cite your sources to support the allegation that HUD sought to "eliminate all down payment assistance"?
Quote:
It is likely that compassionate wisdom and common sense will prevail in this situation as it is plainly obvious that allowing homebuyers to cover the cost of their down payment with down payment gift funds is far preferable to burdening low-to-moderate income households with higher debt.
By paying their down payment with gift funds, homebuyers begin their home ownership experience from Day One with equity in their new home, that home equity being equal to the amount of their down payment (or at least the amount covered by down payment gifts). This also puts these households that much closer to the day they own their homes outright.
There is absolutely nothing wrong with downpayment assistance from acceptable sources. But it is misleading to state that HUD/FHA is trying to eliminate all forms of assistance. I would point you to the recent news of FHA's allowance of an advance against the housing tax credit as yet another allowable source: http://fha.ml-implode.com/blog.....it-refund/
Great reply Robin, wish I'd seen it when you first posted it!
Robin wrote:
As if it weren't bad enough you come on our forums with your self-serving promotional propaganda (that's a bannable offense, by the way)... your post is misleading and misinformative to boot, which is an extreme disservice to our readers.
somerset wrote:
Somerset Mortgage Lenders and Gregg Marcus strive to keep the public educated with tips meant to make getting your loan as easy and painless as possible. To this end, they have put together this brief article on using downpayment gifts for your FHA loan.
Unlike with most other conventional loans, the Federal Housing Authority (FHA) allows borrowers to pay some or all of their down payment with gift funds. No verification of the source of the down payment money is required. All that needs to be done is for the money to first be deposited into the borrower’s bank account or an escrow account before and until the loan is approved, and for proof of that deposit to be provided.
However, most FHA-approved lenders now require the gift funds to be sourced to verify its legitimacy. So not entirely true.
Quote:
Greater than half of first-time homebuyers receive gift money from relatives in order to help them pay for their down payment. Besides relatives, other accepted sources of down payment gifts are friends, labor unions, faith-based organizations, and charity organizations. Another valid (and novel) source of down payment assistance is through the Bridal Registry program whereby newlywed couples can get gift money deposited into an account for them to use towards a down payment on an FHA loan.
Yes, those are legit examples, but again, most lenders are going to require proof that it's coming from an allowable source.
Quote:
In 2004, President George Bush announced intentions to convince Congress to eliminate the down payment requirement for FHA loans entirely, but so far nothing has come of that.
Ironically, it was the Seller-Funded Downpayment Assistance providers who fought against a 100% financing program for FHA. I won't bother to cite all the various reports that show how detrimental no-money down loans and high-LTV financing have negatively impacted housing finance. If you aren't aware of that by now, you've been living under a rock for the past three years or more. Irregardless of the 0.5% increase in downpayment requirements, FHA still allows gift funds to be used.
Quote:
Recent attempts in the U.S. Congress to pass legislation that would make it extremely difficult for charitable organizations that provide down payment gift funds to claim tax exempt status, thereby disqualifying them from being able to provide a down payment gift fund for FHA loans at all has fortuitously failed.
Is this a vague reference to the IRS' 2006 ruling that seller-funded downpayment assistance organizations may not consider that part of their operations a "charitable business" since the money's really just a wash and their programs are, as this article states, a "scam"? http://www.irs.ustreas.gov/new.....75,00.html
It's becoming obvious where you're going with this.
Quote:
Despite the attempted U.S. Department of Housing and Urban Development (HUD) rule to eliminate all down payment assistance programs, the U.S. District Court intervened to protect low-to-moderate income potential homebuyers. The result of this injunction is that organizations like the Home Down Payment Gift Foundation and the Genesis Foundation can still claim tax exempt status and still provide down payment gifts to would-be FHA mortgages, at least until there is some sort of final resolution on the matter.
Your information appears to be outdated. In case you missed it, the Housing and Economic Recovery Act of 2008 eliminated seller-funded downpayment assistance programs as an allowable source of downpayment funds for FHA borrowers. It did NOT, however, eliminate other traditionally accepted sources of downpayment assistance. Would you care to cite your sources to support the allegation that HUD sought to "eliminate all down payment assistance"?
Quote:
It is likely that compassionate wisdom and common sense will prevail in this situation as it is plainly obvious that allowing homebuyers to cover the cost of their down payment with down payment gift funds is far preferable to burdening low-to-moderate income households with higher debt.
By paying their down payment with gift funds, homebuyers begin their home ownership experience from Day One with equity in their new home, that home equity being equal to the amount of their down payment (or at least the amount covered by down payment gifts). This also puts these households that much closer to the day they own their homes outright.
There is absolutely nothing wrong with downpayment assistance from acceptable sources. But it is misleading to state that HUD/FHA is trying to eliminate all forms of assistance. I would point you to the recent news of FHA's allowance of an advance against the housing tax credit as yet another allowable source: http://fha.ml-implode.com/blog.....it-refund/
Who in their right mind would post this thinking this helps our industry???? Pretty soon criminals like you who try and skirt the rules will be behind bars where they rightfully belong. Hey maybe if you get lucky you can serve your time with madoff and get some tips on how to screw the taxpayers some more.
Robin Sentinel
Joined: 30 Aug 2007
Posts: 3416
Location: Loveland, OH
Who in their right mind would post this thinking this helps our industry???? Pretty soon criminals like you who try and skirt the rules will be behind bars where they rightfully belong. Hey maybe if you get lucky you can serve your time with madoff and get some tips on how to screw the taxpayers some more.
I hope that was in response to the original poster and not to my reply.
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